Has the iPhone Finally Met Its Match?

Surprise! Samsung's new Galaxy S III smartphone could rival Apple's (Nasdaq: AAPL  ) iPhone 4S in unit sales. In a press briefing this week, the South Korean electronics manufacturer predicted 10 million Galaxy S III handsets sold by July, implying a run rate of 30 million or more by the end of the quarter.

To be fair, we don't know exactly what "by July" means -- is it July 1, or by the end of July? But we do know that 4S helped Apple sell some 37 million handsets in the company's fiscal first quarter ended in December.

Samsung could get within spitting distance of that total if demand continues as it has, helping the company extend its lead over Apple in a worldwide race for smartphone market share. If so, it would at least partially explain why Apple has been adamant about stopping sales of the device here in the United States. Instead, the S III went on sale on June 21.

A worthy rival
There's a lot to like about the Galaxy S III. Carriers certainly approve. As Wired rightfully points out, Samsung is the only supplier aside from Apple to prevent AT&T and Verizon from placing logos on their handsets.

The implication? Users see the Galaxy series not so much as an iPhone wannabe, but as a peer device that looks about as sleek:

Source: Samsung.

Functionally, the Galaxy S III includes a variety of features that highlight the "smart" in "smartphone." S Voice, Samsung's answer to Siri, is purported to be capable of launching apps -- Apple plans something similar in the next version of iOS -- and pairs with a pop-up video function for watching streams while performing other tasks.

Other features include "social tag," in which the S III uses photos to track and identify the social-network status of friends and family you're connected to. And "Smart stay" keeps the S III's screen bright for as long as you're looking at it. (Check out the entire list of features.)

Get in the fast lane, Apple
If there's a flaw with the S III, it's that the phone customizes Android, a platform that already suffers from so many customizations that upgrading could prove frustrating for users. Buyers are apparently ignoring this potential hazard in favor of the speed the S III offers -- unsurprising when Apple could take till this fall or later to deliver a hyperfast LTE phone, and even that may be too soon.

Meanwhile, Nokia's (NYSE: NOK  ) Lumia Windows Phone also supports AT&T's LTE network. Microsoft's (Nasdaq: MSFT  ) commitment to a common code base for both mobile and desktop versions of Windows 8 should help usher in a flood of new apps for future Lumia models.

How will Apple respond? With the blunt force of a remarkable new handset, I suspect. For now, Samsung's Galaxy S III is selling as if it's every bit the iPhone's equal.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (5) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 27, 2012, at 8:33 PM, bbrriilliiaanntt wrote:

    From a strat perspective, perfect for Apple. SIII makes it a 2-horse race, which is ideal. Especially when your horse has an ecosystem bar none, best design, best software, best apps, and will most likely come to finish many lengths ahead...great news...

  • Report this Comment On June 27, 2012, at 8:36 PM, appface wrote:

    It's really all about the mobile apps and who controls access to them as brought out here: http://seekingalpha.com/article/687351-game-changers-5-mobil...

  • Report this Comment On June 27, 2012, at 8:45 PM, TMFTheDoctor wrote:

    "If there's a flaw with the S III, it's that the phone customizes Android, a platform that already suffers from so many customizations that upgrading could prove frustrating for users."

    I see this complaint in basically every review I've seen of the S3. It makes me feel like I must be the only person in the world who actually likes the TouchWiz UI. Admittedly I haven't tried Android in its naked form, but having gone from the Evo to the Galaxys S2 and now the S3, I can say TouchWiz is at least a lot better than HTC's Sense (IMO).

  • Report this Comment On June 27, 2012, at 8:47 PM, macgregor54 wrote:

    Match? Clone, you mean.

    Do you think Samsung will keep up the revisions on its version of Android? Plan out a long term set of coordinated assets, services, features, retail outlets, upgrades? Are they making any money on these things? Android's free, for sure, but fragmented as hell. If I have a paid Android app running on another phone, can I use it on my S3? Can I use it on my tablet? Can I use it on my desktop? Will I have to replace them all each time a click in the OS revision occurs? Then, of course, there's that whole Retina thing. No one seems to have a match for that, yet. 4X the pixels. 4X. And users say it matters, even though spec-orinented 'droid fans may diss it.

    "Met it's match" has a long way to go before the question has much validity. For the moment, until Samsung seems troubled by the amount of cash it is piling up, I'd submit an unqualified "No".

    We'll see in a year, post Win8 and Surface, when the cannibalization of the also-rans is in full swing.

  • Report this Comment On June 28, 2012, at 3:50 PM, Matthewuwf wrote:

    Clone or not, competition in this respect is a good thing. People like their options. Samsung is clearly risen above all of the other "also ran" device manufacturers with their galaxy series. I just recently purchased a Samsung Galaxy Nexus the other day and could not be more pleased. I considered an iphone, but with their restrictions and warranty policy I went the other direction. Not to mention though younger I am also nearly blind. I need all the screen I can get.

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